We got slightly softer PMIs yesterday from the Eurozone economy, however despite weaker prints we are still at high levels which could foretell well for the nearest future of the EMU. There is no doubt that the German economy is becoming the brightest spot of the whole Eurozone which has been confirmed by the IFO release.
The German IFO reading of business climate came in at 116 vs. 114.9 was expected. Moreover, the prior reading was revised marginally up from 115.1 to 115.2. It’s worth underscoring that not just the current outlook is getting better but expectations are improving as well. A decent set of releases has supported the euro to some extent in early trading. Besides, the European equities are taking advantage of it with CAC40 (FRA40 on xStation5) and FTSE100 (UK100) leading the gains.
When it comes to US stocks’ performance there were quite murky spirits during the yesterday’s session. While the SP500 (US500) lost all but 70 points, the NASDAQ (US100) managed to close higher 0.36% achieving the highest close ever. The tech-heavy index is up nearly 20 percent year to date. In terms of earnings there was a release from Alphabet which chiefly beat forecasts regarding revenue as well as EPS. On the other hand, the company reported a massive decline in cost-per-click (-23% yoy) which turned out to be more important as the stock tumbled in the aftermath of the reading and erased much of its previous profits.
As far as macroeconomic releases are concerned there are not much of them scheduled for today. We’ve already known the IFO prints as well as the British CBI industrial orders reading which decreased from 16 to 10 while 12 was anticipated. The pound has slipped slightly after the reading, however there have been no more notable moves. Looking ahead, the US consumer confidence gauge (the Conference Board) is expected to come in at 3:00 pm BST. Either way, the most significant reading will be unveiled during the Asian session from the Australian economy – CPI.
Given that the US Federal Reserve is beginning its two-days meeting today, let us present our preview. Even as no changes in policy are expected, markets’ attention will be on rhetoric which could suggest a date when the balance sheet begins unwinding.